Comparing Employer-Sponsored and Federal Exchange Plans

Just under seven million Americans acquired private insurance through the new health insurance exchanges, or Marketplaces, in 2014. The exchange plans are required to cover essential health benefits, including prescription drugs. However, the generosity of prescription drug coverage in the plans has not been well described. Our primary objective was to examine the variability in drug coverage in the exchanges across plan types (health maintenance organization or preferred provider organization) and metal tiers (bronze, silver, gold, and platinum). Our secondary objective was to compare the exchange coverage to employer-sponsored coverage. Analyzing prescription drug benefit design data for the federally facilitated exchanges, we found wide variation in enrollees' out-of-pocket costs for generic, preferred brand-name, nonpreferred brand-name, and specialty drugs, not only across metal tiers but also within those tiers across plan types. Compared to employer-sponsored plans, exchange plans generally had lower premiums but provided less generous drug coverage. However, for low-income enrollees who are eligible for cost-sharing subsidies, the exchange plans may be more comparable to employer-based coverage. Policies and programs to assist consumers in matching their prescription drug needs with a plan's benefit design may improve the financial protection for the newly insured.